MANUFACTURING
Gap Wants Its Factories to Go Digital When Paying Workers
Gap Inc. is asking 800 of its factories in 30 countries to skip the cash when paying their workers and start depositing workers’ checks using a digital system by 2020.
More than 60 percent of Gap Inc.’s factories already use digital payment methods, such as online transfers to bank accounts or mobile wallets. But there is more to be done. This change will affect some 1 million workers.
About 80 percent of the world’s garment industry is made up of women, who often live in a cash-only environment and have no access to formal financial services. A formal banking system allows workers a safer way to save, invest and transport money.
“By having our suppliers pay garment workers digitally, we aim to accelerate the transition toward a more transparent workplace for the women and men who make our clothes,” said David Hayer, senior vice president of global sustainability at Gap Inc. and president of the Gap Foundation.
Paying workers in cash has led to severe problems in underdeveloped countries where crime is high and workers are at risk of having their wages stolen as they go from their workplace to their homes. This is particularly severe during holiday seasons when factory workers often receive lump-sum bonuses.
Gap Inc. also has joined the United Nations–based Better Than Cash Alliance, a partnership of governments, companies and international organizations that accelerate the transition from cash to digital payments to reduce poverty and drive growth.
